Goldman Poised To Retake Lead In Global M&A Advisory

Goldman Sachs Group Inc. (GS) is poised to retake the lead among advisers on global merger and acquisition transactions, but a surge from big European banks knocked Citigroup Inc. (C) out of its fourth-place spot.

Preliminary data from Thomson Reuters puts Goldman in first place among global merger advisers this year ahead of Morgan Stanley (MS), which ranked first in 2009, and JPMorgan Chase & Co. (JPM), which held onto third place. Goldman also tops the rankings of advisers in U.S. merger transactions this year. Morgan Stanley ranks first among European deal advisers, followed by Goldman and J.P. Morgan.

Deal rankings are closely watched barometers of the revenue pipeline for Wall Street banks, in addition to providing bragging rights for banks at the top. The Thomson Reuters data are preliminary, with two weeks to go in the year, but dealmaking tends to wind down as the calendar nears year-end.

Credit Suisse Group (CS) climbed to fourth from sixth in global advisory so far this year; Deutsche Bank AG (DB) rose to fifth from seventh; and UBS AG (UBS) climbed to sixth from eighth last year. Barclays PLC (BARC.LN) and Lazard Ltd. (LAZ) held steady at ninth and 10th place, respectively.

In the U.S., Goldman, Morgan Stanley and J.P. Morgan held the same top three rankings, in order, compared with last year. Credit Suisse jumped to fourth from ninth and Deutsche Bank climbed to seventh from 13th place last year.

Citigroup was the biggest loser in global and U.S. merger advisory, falling to eighth and 10th, respectively.

The rankings equally weight advisers even if they are on the same deal and play less critical roles. One of the trends in deals, as well as in stock and bond underwriting, is to see several advisers piling into the same assignments.

For example, the second-largest announced transaction this year, the $25 billion takeover of GDF Suez S.A.'s (GSZ.FR) international assets by International Power PLC (IPR.LN), included 10 advisers, seven of them for the acquirer, for which Goldman is listed as the lead, and three for the target, for which Nomura Holdings Inc. (NMR) is named first.

Announced mergers totaled $2.2 trillion so far this year, up from $1.9 trillion last year and the most active year since the 2008 credit crisis put a chill on dealmaking. However, for the fourth quarter volumes were down 17% to $180 billion.

On Friday, Bank of Montreal (BMO, BMO.T) announced plans to buy Marshall & Ilsley Corp. (MI) for $4.1 billion in stock. Bank of Montreal advised itself along with J.P. Morgan. M&I was advised by Bank of America Merrill Lynch, which ranked fifth globally so far this year and seventh in U.S. deals, according to Thomson Reuters.

Private equity-backed deals are more than double the volume of last year as sponsors return to dealmaking after a two-year lull. There were 211 financial sponsor deals so far this year, up from 121 last year, though still well off the 2007 peak of 801 deals.

-By Liz Moyer, Dow Jones Newswires; 212-416-2512; [e-mail]